A fusion drive is an SSD combined with a traditional hard drive. It has some clever software which means you use the SSD for short term memory and OS and the hard drive for longer term stuff. It almost gives you the speed of an SSD but at a fraction of the cost. If you're looking at external SSD you would need to connect by thunderbolt to see any speed benifit, and thunderbolt drives are not cheap.

Also what about External SSD? Is External SSD act as an External HardDrive i thou SSD only stores your applications?

I need to get with the times. I tried to read up on it but it confuses me even more.

SSD is a type of flash storage like you would have on a usb or your phone or ipod. SSD is expensive so some people have a small ssd for the operating system and the applications because they boot quicker. This essentially is what fusion is. A small ssd fused with a regular hd to store your additional files like music and movies.

I think because of thunderbolt people can hook up an external ssd to their computer and have the Operating system and applications run on that. This proba cost saving measure as built in hard drives cost hundreds. The 768gb ssd for imac prob will cost maybe even 1000..

Also what about External SSD? Is External SSD act as an External HardDrive i thou SSD only stores your applications?

I need to get with the times. I tried to read up on it but it confuses me even more.

An SSD is a solid state drive that stores your data in memory chips, whereas a normal hard disk (HD) stores your data as magnetic information on a disk. SSDs are faster and more reliable (no moving parts) than HDs, but SSDs cost a lot more per MB storage. As far as your system is concerned, both the SSD and the HD appear as storage devices.

The fusion drive consists of a 128MB SSD and a 1TB HD. The Mac OS ‘fuses’ them into a single drive, and then manages the data on them such that files that are accessed a lot are moved onto the faster SSD part. This should give the speed benefits of a large SSD without the high cost.

An external SSD can store whatever you want i.e. you could get a large, external SSD and have the OS, applications and all your data on it. SSDs are not just for applications.

I am going full SSD... combined with my 8TB Thunderbolt Pegasus R4. My biggest reason is because I want to control what is on the SSD.

Example:

My #1 performance sensitive app is Aperture 3. My library is 350 GB and has hundreds of thousands of files.

With SSD: 100% of my A3 library can be on the SSD
With Fusion: The A3 application, and some of my library can be on the SSD, but I have no control.

In either case... the application itself can launch quickly. However, since my A3 library cannot fit in the SSD portion of the Fusion drive... as I scroll through 100's of thousands of pictures... my disk will be thrashing away trying populate the thumbnails and preview photos from disk... which in turn will cause stuttering or temporarily blank frames. With the 100% SSD... everything will be resident on SSD (at my direction)... and from experience... I know that it will fly.

Bottom line: I can control what lives on the SSD... and I can put everything else on the Pegasus. Candidates for the external array (RAID 10) will be my iTunes library (not performance sensitive) and 100% of my videos.

Everything (including both the SSD and Pegasus) will be double backed up via TM and Crashplan+.